Tax credits were partly set up with the aim of reducing child povertybut they have ended up plunging thousands into debt after overpaymentswere made and clawed back.
Two new reports, one by a cross-party group of MPs and one by a leadingthink-tank, have looked at what the Government needs to do to addressthe problems plaguing the "new frontier of the welfare state" (ChildrenNow, 14-20 June).
The report by Parliament's Treasury Sub-Committee found that human errorand IT system error had caused or contributed to the overpayments, whichadd up to roughly 4bn between 2003 and 2005.
Regime is not working
Conservative MP Michael Fallon, the Treasury Sub-Committee's chairman,called the problems appalling and said it "demonstrates that the regimeis currently not working". He called for the system to be "more flexibleand more customer-focused" and said "tax credits are right in principle,but too many low-income families have been wrongly paid and messedaround".
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